Yes, your Betamax cassette player still works! It was such a revolutionary product in 1979. Even today, your Betamax player can still record and play videos. But why bother with it? New technology is so much better.

Your landlord business model might be working fine as well. Buying smart and charging little more than your expenses still makes sense. However, the model of yesterday pales in comparison to what you can do today. Are you overdue for an upgrade?

By “upgrade” I mean accomplishing your wealth building objectives faster and with fewer moving parts.

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You can easily net an additional 30% by creating a housing solution for a specific group and growing your reputation as the best option in town. Customize your color scheme, furnishings, design choices, lease terms, pet policy, air filtration and accessibility to solve their problems. You’ll have fewer vacancies and more demand — a better approach to landlording.

2. Tap Ancillary Income Opportunities

Betamax-ers never think to tap the endowments within their rentals. They focus too much on acquiring more rentals and not enough on optimizing what they have. Buying more rentals only guarantees you’ll have more expenses. There is a less risky way to net an extra $100 per month.

You can easily net 30% more by opening your eyes to the profit centers that surround you. Your existing rental may be perfectly suited to:

Broadcast or repeat a signal. Cell phone repeaters, wifi antennas, live cam feeds — there may be rooftop lease opportunities especially for you. The elevation of your rental’s rooftop and the views from that vantage point are assets.

Display political or non profit banners. Check your rental’s fence lines; they are great places to hang banners. You may have the ability to hang advertisements outside of your tenants’ view but within the view of a busy highway. Deploy this underutilized space to increase your bottom line via “in-kind” tax deductions or advertisement revenue.

Distribute U-Haul trucks. Your zoning and lot configuration may be perfect for a small, part-time U-Haul dealership. You can set one up for FREE. Just contact U-Haul for details.

3. Exercise Your Civic Leadership

Betamax Landlords dismiss the neighborhoods surrounding their rentals. They classify civic leadership as a “charitable” activity best left to nonprofits and someone else.

If you only serve a luxury market, then your civic leadership, from a landlord’s role, is not needed.

However, if you’re a mid to lower end landlord and you’re dismissing civic leadership, then you’re squandering your income and equity-potential.

Trading something of value (a little of your time) for something of much greater value (improved safety, visual impact, orderliness) is a fundamental investment principle. Why do so few landlords understand this?

Organize a local email directory of property owners and landlords, “inspire” someone to keep your block litter-free, or sponsor an annual block party. These super simple things will lift the lid on your rents.

Long-distance landlords, you have an opportunity here as well. If you can’t physically exert yourself, then financially support a local leader and/or organization that makes good things happen on your block.

If you want a bigger harvest, add nutrients.

4. Experiment With One Unit

Betamax-ing multifamily landlords operate each unit in the exact same way. It never occurs to them that they can mix and match. You don’t need to ask permission. Consider furnishing one unit and experimenting with Airbnb, vacation rentals or short stay housing. How about a boutique unit with high-end furnishings and some razzle-dazzle? Would that spike your income?

Experiment with using RelayRides.com to rent a car to your short stay renters. Or use SpinLister.com to rent bicycles to them. You can create a unique experience that the big corporations can’t match. That’s a lucrative position to occupy.

Jeremiah Owyang keeps a running list of Collaborative Economy businesses. You should follow his work. Emerging app/web-based businesses allow landlords to customize their housing offerings and generate additional income in synergistic ways. Don’t let Craigslist be the only web-based tool you use.

Be adventurous! You might find a sweet spot for your market that is 10x more profitable than your current way of operating.

Parting Thoughts

You’ve got more (and less risky) options than just acquiring more rentals to grow your net. That Betamax way of thinking derails you from discovering the profitable potential of your current rental holdings.

You as a manager of cash flow streams have the ability to create endless amounts of value — some of which can be converted into cash flow. But in order to venture out, you have to be brave and willing to leave your comfort zone.

Niche up, tap your endowment, engage your community and explore furnished housing. I guarantee if you use one or all of these tactics, your rental will be 30% more profitable.

Now… are you ready for an upgrade?

Landlords: What digital age features have you adopted in your business?

Share your ideas below!

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About Author

Al Williamson helps landlords increase their monthly income by sharing unique tips to save money. He is the author of Airbnb for Landlords, and he blogs at LeadingLandlord.com and is an active BP member.

You may have mentioned this elsewhere, but I’m having great luck with building garages. Most of the existing tenants won’t pay extra for it, but there are people that will pay $350/month for a standard 2-car garage.

The high volume garage builder hereabouts charges $15k and literally gets it built in one week. I was really impressed.

In the UK many of landlords provide furnished accommodation to their tenants. They would often convert a large house into ‘bed sits’ so each tenant has their own bedroom whilst bathrooms, kitchens, and living rooms are shared.

I would be interested to learn if US has a similar model? And what sort of demand there is for these kind of properties? Would you go for professional working class tenant or tenant in receipt of benefits?

Yes the US does have a similar model on many levels. Senior housing follows your “bed sit” model. We call it assisted living.

Rooming houses follow that model as well. The US has high end rooming houses for computer programmers and low end houses for sex offenders and people recently released from jail. It’s a very lucrative niche.

I like to deal with professional. I operate a bed sit for medical students/doctors. Check it out at http://www.thedocdorm.com

I’ve seen several people have success adding vending machines. They don’t take up much room and can make as much money as additional units. If you have a higher end renter I would suggest looking looking into filtered water machines. Here in LA I’ve seen them charging as much as $1.50 a gallon for alkaline water. If you go with healthy snacks in your vending machines that will also make your property appear more high end.

Great article Al. Most people don’t realize all the ways to maximize the potential of their income property and have only scratched the surface. These are some great ways to increase the bottom line and always make sure you’re on the leading edge of operating at 100%!

Darren, You’ve good head on your shoulder! You’re spot on. Our rentals are just waiting to spin off more money for us – they have the potential.

We landlords need to look at prevailing market rents as the bottom of the income envelope. Optimizing is a low risk way of generating a significant amount of income. I’m going to write a few more articles and hopefully give enough examples to help folks out.

Wow Al, this is exactly what i been looking for. U see the country that i will be invested had a very low Cap rate and majority of the investors there have negative cash flow but high appreciation. I’m not one of them who look at real estate for capital gain or net worth, but focus on cash flow using good debt. So because of that, i’m now looking for ways to use ancillary income to paid for the mortgage instead of relying on the rent. Plus the ideas of becoming an entrepreneur always fascinated me.

PS: Just want to said, i found this great article from your “How I’ve Used Ancillary Income to Cover 63% of My Mortgage” which is one of the most inspiring drive for me in investing real estate. Thank you Al.